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Trade war: Signs of progress in US-China talks
By Heather SCOTT
Washington (AFP) Dec 16, 2018

USTR Lighthizer, tough negotiator in Trump's shadow
Washington (AFP) Dec 16, 2018 - He stays out of the limelight but shares President Donald Trump's mistrust of China and the threat it posed to US economic power.

US Trade Representative Robert Lighthizer has emerged as the US strongman in the ongoing trade negotiations, determined to force changes in Beijing's economic policies.

A day after signing a new free trade agreement with Canada and Mexico after over a year of tough negotiations, Trump tapped the 71-year-old Lighthizer to lead this time the delicate trade talks with Beijing, with perhaps more at stake for the global economy.

Trump previously entrusted that mission to Commerce Wilbur Ross and Treasury Secretary Steven Mnuchin. Without success.

The title of US Trade Representative (USTR) makes him a full member of the "cabinet", that is to say the government gathered around the US President and the US representative in the World Organization Trade (WTO).

And Lighthizer is a veteran of trade negotiations, having served as deputy USTR under Republican President Ronald Reagan in the 1980s, and dealt with Japan, the trade power at the time.

Like Trump, Lighthizer believes free trade cannot be unfettered and must be reciprocal.

In the talks with China, the objectives are clear: to force the Asian giant to put an end to trade policies the US deems "unfair," especially the theft or forced transfer of American technology, and state subsidies for industry.

The countries agreed to a 90-day truce through March 1, but without at agreement, Trump will continue to impose punitive tariffs on Chinese goods imported into the United States.

"Technology is the most important advantage that Americans have economically," Lighthizer said in a recent, and rare, television interview.

"We will protect that technology and get additional market access from China. If that can be done the president wants us to do it. If not we'll have tariffs."

- Promises and action -

Lighthizer will not be satisfied with promises. He wants actions.

Unlike Trump who revels the spotlight, Lighthizer keeps a low profile.

During negotiations with Canada and Mexico his appearances were rare, his speeches parsimonious, his press releases distilled.

He makes it a point of honor not to expose in public what is happening behind the scenes.

Lighthizer comes from an affluent family in Ashtabula, Ohio an important port on Lake Erie. It was used for coal and ore transport at the end of the 19th century, and the town's decline contributed to his skepticism about globalization and its drawbacks, according to relatives cited by The New York Times.

Prior to being named USTR in May 2017, Lighthizer, a father of two, was a partner in the Skadden law firm where he was a specialist in international trade law for more than 30 years.

Imposing stature, piercing gray-blue eyes, he is described as a man as "grumpy" in private as in public.

"He's very particular. Bombastic at times," said an official close to the US-Canada-Mexico talks. But he is "also charming, with a great sense of humor" and "tremendously respected his strong intellect."

Like many of the Washington elite, Lighthizer attended Georgetown University both as an undergraduate and for law school.

Though markets are on edge and the arrest of a top Chinese executive threatened to spark a crisis, there are signs the US-China trade war can be resolved without further collateral damage to the global economy.

The whole world is watching the talks between Washington and Beijing, hoping a 90-day tariff truce will hold and the sides can end a dispute that threatens hundreds of billions of dollars in trade.

In recent days the small signs of progress, and perhaps more importantly the absence of new threats from President Donald Trump, have cheered investors worldwide, reversing some of the bloodletting that erased all of 2018 gains on Wall Street.

And the arrest in Canada of a senior Huawei executive amid US charges the company violated sanctions on Iran raised fears the renewed tensions could disrupt the talks -- but so far this does not seem to have happened.

"What is clear is that both President Trump and the Chinese are trying to separate the issues," said Edward Alden, a trade expert at the Council on Foreign Relations.

In fact, Beijing on Friday announced that starting January 1 it would suspend the additional punitive tariffs on US autos imposed in retaliation for Trump's tariffs on China, cutting them to 15 percent from 40 percent.

And the talks last week produced reports the country would restart purchases of soybeans from American farmers and ease investment rules for US companies.

"China wants to make a big and very comprehensive deal. It could happen, and rather soon!" Trump tweeted on Friday, applauding the decision on car tariffs.

The ceasefire began after Trump met with Chinese leader Xi Jinping in Buenos Aires on December 1 and agreed to hold off on further tariffs or retaliation at least until March 1.

That means Trump will hold off on plans to more than double import taxes on $200 billion in Chinese goods at the start of the year and will also refrain from imposing tariffs on the remaining $246 billion in Chinese products the United States imports each year.

- 90-day outcome -

Trade experts and observers agree the timeframe will not allow for a comprehensive trade pact between the world's two biggest economies.

Instead they say they hope to see a deal to roll back the tariffs and continue negotiations on the Chinese policies that have long been irritants to relations with Washington: forced transfer or theft of American technology, restrictive investment rules and industrial subsidies.

"You can't solve every problem with China in 90 days, but progress could be made institutionalizing" changes to Beijing's policies, Jake Colvin, vice president of the National Foreign Trade Council, told AFP.

But he cautioned that both sides "need to figure out a path to a win-win outcome. They both need to be able to say they gained something."

US Trade Representative Robert Lighthizer is leading the negotiating team, which includes Treasury Secretary Steven Mnuchin and White House trade advisor Peter Navarro.

"The basic problem here is that the United States and China don't trust each other," Alden told AFP.

"The best hope is a partial deal that addresses some of the US concerns and then the negotiations to continue while the progress is closely monitored."

Navarro, an anti-China firebrand, last week warned that US negotiators would hold "tough" with China, and said the key would be to "trust but verify."

But he also cautioned against watching day-to-day reports instead of focusing on March 1, "when we'll have a complete offer from China."

- Back where they started -

Ironically, that would put the two sides essentially back where they started before Trump took office.

Washington and Beijing had for over a decade conducted regular trade negotiations to resolve disagreements, and when progress was slow -- a frequent complaint -- or talks failed, the United States filed complaints with the World Trade Organization.

But Trump, who uses uncertainty as a core negotiating strategy, jettisoned diplomacy and went straight to hardcore tactics. He takes credit for bringing Beijing to the table and for raising $11 billion in tax revenue from the tariffs.

However, he seems to ignore the fact the taxes were paid by US businesses and consumers, not by China, and the trade battle already has had an impact on the US and Chinese economies, in addition to stock markets.

Still, the fact that Trump put Lighthizer -- a veteran of 1980s trade talks with Japan -- in charge of the negotiations is seen as a good sign.

"Bob Lighthizer is the only serious trade negotiator this administration has," Alden said. "And there is more substantive progress in the past two weeks than there was in the previous two years."


Related Links
Global Trade News


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TRADE WARS
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The pattern is familiar: Canada arrests a Chinese national wanted in the US. Shortly after, a Canadian national is locked up in China. Friends and experts say former Canadian diplomat Michael Kovrig, who was detained in Beijing on Monday, may have become a "hostage" and "pawn" in a three-nation feud. Kovrig was detained just nine days after Chinese tech giant Huawei's chief financial officer, Meng Wanzhou, was arrested in Vancouver at the behest of the United States on Iran sanctions-related cha ... read more

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